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Járai calls for a brand new economic policy

January 14th, 2012

“It is crystal clear by now that the markets cannot tolerate Hungary’s “unorthodox” economic policies any longer,” says PM Orbán’s former Finance Minister.

In an interview in Világgazdaság, Zsigmond Járai, who has just resigned as chairman of the Fiscal Council, but kept his job as chairman of the Supervisory Board of the National Bank, says the only way for Hungary to emerge from its present serious position is via a thoroughgoing shift in its economic policies.

He believes that shift is already under way, and cites two items of evidence:  the application for a standby credit line from the IMF, and this year’s budget, which contains the intention of slashing the deficit by 4 to 5 per cent of GDP. “Several further changes are also indispensable,” Jarai warns, “and if the government is not ready for them, they will be imposed by international organisations.”

Under this title he includes the abolition of the special taxes imposed on banks and telecom service providers. Járai also suggests more consultation before new legislation is introduced, as well as more dialogue with Hungarian entrepreneurs and international investors. Járai was Finance Minister under the first Orbán government in the late 1990s and subsequently served as president of the National Bank. More recently, he has been widely considered one of the main “tormentors” of his successor in that post, András Simor. In this interview, however, he says that “the National Bank must be left alone to do its job, even if some of its decisions may spark disapproval.” Járai warns that Hungary must “comply 150 per cent with EU standards.”

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